Cash-out Refinance Vs. Limited Refinance Rates

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Hi all, I'm in the middle of refinancing a 3-family with a 30-year fixed-rate conventional loan at a local Credit Union. The appraisal came in higher than I expected, presenting an opportunity to cash-out ~$75K while maintaining 70 LTV. The Credit Union said that the rate would increase from 4.25% to 5% (or 0.25% lower if I pay the ~$5.5K in closing costs). Does this 0.75% increase sound reasonable? I thought 0.25%-0.375% was more typical, so I'm curious if they're taking advantage of this opportunity to account for the amount rates have increased over the last month since they locked my rate. Thanks for the help.